5 Reasons Why A Franchise Works Better Than A Classic Start-up

I have always dreamed of starting my own business, being independent, and turning the wheel myself that is otherwise used to turn. I imagined that all you really need is a good idea, self-confidence, and a portion of freedom from pain in addition to start-up capital.

Well, optimism and a small portion of naivety are generally not bad either, as these characteristics allow one to have an optimistic view of things.

So you don’t throw in the gun at the first setbacks but look for solutions in the form of alternative paths to the goal. But then … then you can actually get started. And tomorrow you will make a lot of money. And the day after tomorrow you will be rich….

Rich in experience, perhaps. Life leaves not only traces but also experiences. One of the most important experiences is that you don’t know everything by yourself.

But at least as an entrepreneur, you often need outside support; you don’t have to be able to do everything and do everything on your own.

Helping hands, but also and especially a railing, are very helpful in order not to burn your fingers on the stovetop, like so many others. A successful company development does not come by itself.

Even if one is aware that self- employment involves a lot of work – it is no coincidence that the word self-employed is constantly included – ideas often fail less because of the will to commit or the idea itself.

In many cases, it is more due to setbacks from a lack of experience in Capital requirements, marketing, cost control, and, for example, the structures and processes of a functioning company.

The focus is on the operative business, and subordinate importance is attached to the administration and the organizational processes.

If you want to become self-employed, you should definitely deal with franchise concepts. This is all the more useful when there are only roughly outlined ideas about an idea.

The spectrum of franchising is diverse and ranges from petrol stations to hardware stores, education, food, and leisure activities. With franchising, partnership-like cooperation arises between the franchisor and the franchisee, in which advantages similar to a large company with a solid and secure market position can arise.

This can also mean that the wheel is not reinvented, and something is created with a lot of own effort and capital that already works elsewhere. A franchise can also mean that, through training and further support, broad prior knowledge is not necessary, and a lateral entry is possible.

However, the really serious advantages are to be able to fall back on an entrepreneurial “construction kit” comprising service, marketing, organization, and controlling.

This basic structure then also supports the operative business by enabling a concentration on customer contact and the customer proximity and flexibility required here.

With franchising, among other things, bundled conditions also create advantages over normal trade, which often achieves lower margins due to a lack of volume and competition from the Internet.

With this support, in my opinion, franchise company founders have a significantly higher chance of survival than other founders. It should be noted here that the number of company founders’ tasks should not be equated with bankruptcies.

Failure is often due to negative surprises from decisions, company management, or changed framework conditions that do not have to be dealt with alone in franchising.

From this, five reasons can be summarized why a franchise establishment works better than a classic establishment.

For these 5 reasons, a franchise works better than a classic start-up.

1. Establishment

  • Reduced start-up risk through joining an existing, tried and tested business concept or brand
  • The franchisee benefits from the franchisor’s expertise right from the start. This largely avoids founding errors
  • Information and experience from other franchisees can be obtained in advance of the formation
  • By self-interest of the franchisor on the fast and smooth functioning of the operations of the franchisee receives a start-up support
    • in ways to the actual founding act
    • for location analysis and choice of location
    • when choosing a specific property
    • in the event of contract negotiations
  • Costly and time-consuming errors can be avoided by mostly existing suppliers and service providers for the conception and establishment of the branches

2. Finances

Easier procurement of outside capital through:

  • reduced entrepreneurial risk as a franchisee
  • verifiable functioning of the concept
  • possibly verifiable sample numbers

3. Marketing

  • Easier market entry through an established franchise concept
  • Image of a large company, the protected name is adopted
  • also tried and tested range of brands or services
  • Marketing strategy, as well as corporate identity and corporate design, do not have to be created
  • significant shortening of the “time to market” compared to normal foundations
  • joint marketing and advertising activities, existing advertising materials

4. Company processes

  • Railings for company processes
  • The takeover of accounting work / controlling / reporting
  • possibly QM system
  • Support from franchisors and self-interest in the functioning of the businesses
  • inkaufs- and cost benefits

5. Networking

  • Access to experiences that help avoid initial mistakes
  • Knowledge level through training
  • Support in the network
  • Information on industry-related innovations / changes
  • Exchange of positive and negative in the interest of a common appearance
  • A common interest in a uniformly high-quality standard and in avoiding negative publicity that could damage our image

Conclusion

Suppose it is not about a unique business idea or your own development and its marketing. In that case, you should first check whether there is an already established franchise concept that you can use for yourself when planning your own business. It is a more convenient way of starting your own business than having to think of everything yourself.

You are not alone and receive a lot of support, but you have to be clear that you are part and co-creator of an overall system and overall success. Identification with the franchise concept and solidarity with the franchisor and other franchisees is essential.